Attached files
| file | filename |
|---|---|
| 8-K - FORM 8-K - China Botanic Pharmaceutical | v208930_8k.htm |
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Company
Contact:
|
CCG
Investor Relations:
|
|
China
Botanic Pharmaceutical Inc.
|
Mr.
Mark Collinson, Partner
|
|
Ms.
Portia Tan, IR Contact
|
Phone:
+1-310-954-1343 (Los Angeles)
|
|
Tel:
86-451-8260-2162
|
Email:
mark.collinson@ccgir.com
|
|
Email:
ir@renhuang.com
|
Website: www.ccgirasia.com
|
|
Mr.
Crocker Coulson, President
|
|
|
Phone:
+1-646-213-1915 (New York)
|
|
|
Email: crocker.coulson@ccgir.com
|
For
Immediate Release
China
Botanic Pharmaceutical Reports Fourth Quarter and Fiscal Year 2010
Results
§
Provides Guidance for FY 2011
Harbin, China – January 25,
2011 – China Botanic Pharmaceutical Inc. (AMEX: CBP) (formerly Renhuang
Pharmaceutical, Inc.) ("China Botanic" or the "Company"), a developer,
manufacturer and distributor of botanical products, bio-pharmaceuticals and
traditional Chinese medicines (“TCM”) in China, today announced financial
results for the three months and fiscal year ended October 31,
2010.
Fourth
Quarter 2010 Highlights
|
§
|
Net
sales grew 15.2% year-over-year to $16.7
million
|
|
§
|
Gross
profit increased 13.3% to $9.1 million from $8.0 million in the fourth
quarter of fiscal year 2009
|
|
§
|
Gross
margin was 54.4%
|
|
§
|
Net
income was approximately $5.6 million or $0.14 per diluted share, as
compared to approximately $5.8 million or $0.15 per diluted share a year
ago
|
|
§
|
New
products, including Qing Re Jie Du Oral Liquid, Compound Schisandra
Tablets, and Ginseng and Deer Antler Extract accounted for 8.2% of gross
sales in the fourth quarter of fiscal
2010
|
Fiscal
Year 2010 Highlights
|
§
|
Net
sales rose to $55.2 million, an increase of 27.1% over fiscal year
2009
|
|
§
|
Gross
profit increased to $29.4 million, up 27.4% from $23.1
million
|
|
§
|
Gross
margin was 53.3% compared to 53.2% in fiscal year
2009
|
|
§
|
Net
income rose 20.4% to $17.9 million or $0.44 per diluted share, as compared
to $14.8 million or $0.41 per diluted share in fiscal year
2009
|
|
§
|
Introduced
three new products: Qing Re Jie Du Oral Liquid, Compound
Schisandra Granules and Deer Antler Extract, which together accounted for
approximately 3.0% of gross sales in
2010
|
|
§
|
In
July 2010, the Company’s common stock began trading on NYSE AMEX market
under the symbol “CBP”
|
“We are
pleased to report double digit revenue and net income growth in fiscal year
2010. This fiscal year, we maintained a leading market position with our
Siberian Ginseng product series and successfully introduced several new
products, including Compound Schisandra Tablets, which strengthens our offering
in the nerve-regulation and depression treatment segment,” said Mr. Shaoming Li,
Chairman and Chief Executive Officer of China Botanic. “During the
year, we experienced increases in average selling prices of several of our
products, reflecting the continued strong demand for our all-natural plant based
remedies.”
Fourth
Quarter Fiscal 2010 Results
During
the three months ended October 31, 2010, net sales increased 15.2% to $16.7
million, from $14.5 million during the same period in 2009. The rise
was mainly attributable to growing market acceptance and resulting increased
sales volume of the Company’s new products. China Botanic also successfully
gained additional market share during the quarter.
Gross
profit increased 13.3% to $9.1 million compared to $8.0 million in the fourth
quarter of fiscal 2009. Gross margin decreased to 54.4% as compared to 55.3% in
the same period of 2009. The growth in gross profit was mainly driven by
increased sales. The decline in gross margin was a result of changes in the
Company’s product mix and higher raw materials costs.
Operating
expenses for the fourth quarter of fiscal 2010 were $3.5 million, as compared to
$2.2 million in the same period last year. Sales and distribution expenses rose
to $1.3 million from $1.1 million a year ago. The spending increase reflected
continued investment in the Company’s distribution network and TV advertising in
order to increase product market share and create greater consumer awareness of
the Company’s premium quality products. General and administrative expenses
increased to $1.4 million from $0.4 million in the fourth quarter of fiscal
2009, primarily reflecting warrants and options granted for services,
increase in professional fees, and amortization of intangible assets purchased
in the fourth fiscal quarter. Research and development expenses were $0.8
million, up from $0.7 million in the year ago period, reflecting the Company’s
commitment to continuing to build a pipeline of products.
Our
operating income in the fourth fiscal quarter was $5.6 million, compared to $5.8
million in the fourth quarter of 2009. Operating margin decreased year-over-year
to 33.6% from 40.0%. The Company did not incur income tax expenses as its
subsidiary registered in the PRC has been granted a tax holiday for fiscal 2010.
For the fourth quarter ended October 31, 2010, net income declined by 3.0% to
$5.6 million, or $0.14 per diluted share, from $5.8 million, or $0.15 per
diluted share in the prior year period.
Fiscal
Year 2010 Results
For the
fiscal year ended October 31, 2010, net sales were $55.2 million, up 27.1% from
$43.4 million in fiscal 2009. The increase in sales was mainly attributable to
the launch of new OTC medicines, increased demand and strong market acceptance
of the Company’s products, effective marketing efforts and product price
increases. Gross profit was $29.4 million, up 27.4% from gross profit of $23.1
million in fiscal 2009. Gross margin was 53.3% compared to 53.2% in fiscal 2009.
Operating expenses for fiscal 2010 were $11.6 million, as compared to $8.3
million for the same period a year ago. Income from operations was $17.8
million, up 20.2% from $14.8 million in fiscal 2009. Net income was $17.9
million, or $0.44 per diluted share, up 20.4% from $14.8 million, or $0.41 per
diluted share, for the same period a year ago.
Financial
Condition
As of
October 31, 2010, the Company had cash and cash equivalents of approximately
$27.8 million and total current assets of approximately $50.5 million. As of
October 31, 2010, China Botanic had working capital of approximately $47.1
million as compared to $32.0 million for the fiscal year ended October 31,
2009. The Company has enhanced its working capital position as a
result of tightened credit terms extended to customers and a decrease in the
level of inventories. The Company had no long-term debt on its balance sheet as
of October 31, 2010. Shareholders' equity stood at $69.8 million, compared with
$50.5 million as of October 31, 2009. Net cash flow from operating activities
increased to $23.8 million during fiscal year end October 31, 2010 from $13.1
million for fiscal year ended October 31, 2009, primarily reflecting increases
in net income and trade receivables and a decrease in inventories.
Subsequent
Events
On
November 23, 2010, the Company successfully exhibited its unique portfolio of
natural products at the 108th China Import and Export Fair recently held in
Guangzhou, China. The Company attracted over 1,000 foreign and domestic visitors
at its booth and signed letters of intent from 10 prospective
distributors.
On
November 29, 2010, the Company changed its name from Renhuang Pharmaceutical
Inc. to China Botanic Pharmaceutical Inc. to better reflect the Company's
corporate identity, brand image and business operations. The legal structure of
China Botanic remains unchanged.
On
December 2, 2010, Siberian Ginseng (Acanthopanax) Total Flavonoids Extract was
awarded the third prize by the recently held Heilongjiang Province Science and
Technological Progress assessment.
On
December 14, 2010, the Company announced the appointment of Mr. David Dong as
its new Chief Financial Officer.
Business
Outlook
The
market demand for pharmaceutical products in China is rapidly growing and China
Botanic’s growth strategy focuses on capitalizing on such opportunity through
new product introductions, marketing efforts to gain additional market share and
a larger distribution network. For fiscal 2011, the Company estimates net sales
and net income to grow at 28% to 30%. Excluding any non-cash,
non-operational gains or expenses, the Company expects fiscal 2011 net sales of
$70.6 million to $71.7 million and net income of $22.9 million to $23.2 million.
The Company experiences seasonality in its business, which is strongest in the
first and fourth quarter and softer in the spring and summer season or the
second and third quarter. Additionally, the Company’s financial guidance also
reflects its plan to continue to expand its sales and distribution network to
drive growth in market share and to increase R&D spending on its pipeline
projects.
“In 2011,
we expect to see strong growth in revenue as a result of increased market
acceptance and awareness of the benefits of our Siberian Ginseng Series in
treating depression and nerve-regulation. We also anticipate many of our
products will be listed in the reimbursement catalog of essential medicine for
health insurance and we expect to grow as the PRC government moves forward with
its Health Reforms in 2011,” said Mr. Li. “We will continue to present our
product offering at international pharmaceutical trade shows and conventions as
they present outstanding opportunities to showcase our products to an
international audience. In fiscal 2011, we anticipate continued sales growth
from China and expansion into the overseas market.”
Conference
Call
China
Botanic will host a conference call at 9:00 a.m. Eastern Time on Tuesday,
January 25, 2011, to discuss financial results for the fourth quarter and full
year of fiscal year 2010, ended October 31, 2010. To participate in the
conference call, please dial the following number five to ten minutes prior to
the scheduled conference call time: 866-394-2209. International callers should
dial +1 706- 758-1481. The conference ID number for the call is 3846
4897.
If you
are unable to participate in the call at this time, a replay will be available
on Tuesday, January 25, 2011 at 10:00 am Eastern Time, through Tuesday, February
8, 2011. To access the replay, dial 800-642-1687. International callers should
dial +1 706-645-9291. The conference ID number for the replay is 3846
4897.
ABOUT
CHINA BOTANIC PHARMACEUTICAL INC.
China Botanic Pharmaceutical Inc. is
engaged in the research, development, manufacturing, and distribution of
botanical products, bio-pharmaceutical products, and traditional Chinese
medicines (“TCM”), in the People's Republic of China. All of the Company’s
products are produced at its three GMP-certified production facilities in Ah
City, Dongfanghong and Qingyang. The Company distributes its botanical
anti-depression and nerve-regulation products, biopharmaceutical products, and
botanical antibiotic and OTC TCMs through its network of over 3,000 distributors
and over 70 sales centers across 24 provinces in China. For more
information, please visit www.renhuang.com.
Safe
Harbor Statement
This
press release contains certain statements that may include forward-looking
statements within the meaning of the Private Securities Litigation Reform Act of
1995. Such statements are based upon management’s beliefs, assumptions and
expectations of the Company’s future operations and financial performance,
taking into account the information currently available to management. These
statements are not statements of historical fact. Forward-looking statements
involve risks and uncertainties, some of which are not currently known that may
cause actual results, performance or financial condition to be materially
different from the expectations of future results, performance or financial
condition expressed or implied in any forward-looking statements. These
forward-looking statements are based on current plans and expectations and are
subject to a number of uncertainties including, but not limited to, the
Company’s ability to manage expansion of its operations effectively, and other
factors detailed in the Company’s annual report on Form 10-K and other filings
with the Securities and Exchange Commission. The Company undertakes no
obligation to publicly update or revise any forward-looking statements, whether
as a result of new information, future events or otherwise. You are cautioned
not to unduly rely on such forward-looking statements when evaluating the
information presented herein.
-
Financial Tables Follow-
CHINA
BOTANIC PHARMACEUTICAL INC. AND SUBSIDIAIRES
CONSOLIDATED
BALANCE SHEETS
|
As
of October 31,
|
||||||||
|
2010
|
2009
|
|||||||
|
ASSETS
|
||||||||
|
Current
assets:
|
||||||||
|
Cash
and cash equivalents
|
$
|
27,826,142
|
$
|
8,111,514
|
||||
|
Trade
receivables, net
|
19,814,438
|
23,203,410
|
||||||
|
Due
from related parties
|
28,877
|
130,199
|
||||||
|
Inventory,
net
|
2,645,616
|
3,024,016
|
||||||
|
Prepayments
|
-
|
89,281
|
||||||
|
Other
receivables, net
|
200,994
|
102,613
|
||||||
|
Total
current assets
|
50,516,067
|
34,661,033
|
||||||
|
Property
and equipment, net
|
2,069,460
|
2,352,163
|
||||||
|
Intangible
assets , net
|
1,953,617
|
|||||||
|
Deposits for
properties
|
18,605,935
|
16,137,000
|
||||||
|
Total
assets
|
$
|
73,145,079
|
$
|
53,150,196
|
||||
|
LIABILITIES
AND SHAREHOLDERS’ EQUITY
|
||||||||
|
Liabilities
|
||||||||
|
Accounts
payable
|
$
|
333,555
|
$
|
369,329
|
||||
|
Value
added tax payable
|
1,064,066
|
1,186,642
|
||||||
|
Accrued
employee benefits
|
1,645,192
|
1,136,267
|
||||||
|
Warrant
liabilities
|
342,770
|
-
|
||||||
|
Total
liabilities
|
$
|
3,385,583
|
$
|
2,692,238
|
||||
|
Shareholders’
equity
|
||||||||
|
Preferred
stock (no par value, 1,000,000 shares authorized; none issued and
outstanding as of October 31, 2010 and 2009)
|
-
|
-
|
||||||
|
Common
stock ($0.001 par value, 100,000,000 shares, authorized;
37,239,536 issued and outstanding as of October 31, 2010 and
2009, respectively)
|
37,240
|
37,240
|
||||||
|
Additional
paid-in capital
|
7,627,987
|
7,596,525
|
||||||
|
Common
stock warrants
|
496,732
|
496,732
|
||||||
|
Reserves
|
3,372,697
|
3,372,697
|
||||||
|
Accumulated
other comprehensive income
|
4,768,793
|
3,367,659
|
||||||
|
Retained
earnings
|
5
3,456,047
|
35,587,105
|
||||||
|
Total
shareholders’ equity
|
69,759,496
|
50,457,958
|
||||||
|
Total
liabilities and shareholders’ equity
|
$
|
73,145,079
|
$
|
53,150,196
|
||||
|
CHINA
BOTANIC PHARMACEUTICALS, INC. AND SUBSIDIARIES
|
||||||||||||||
|
CONSOLIDATED
STATEMENTS OF OPERATIONS AND COMPREHENSIVE
INCOME
|
|
Three
months ended October 31,
|
Twelve
months ended October 31,
|
|||||||||||||||
|
2010
|
2009
|
2010
|
2009
|
|||||||||||||
|
US$
|
US$
|
US$
|
US$
|
|||||||||||||
|
Sales,
net
|
16,694,929 | 14,496,490 | 55,183,941 | 43,411,562 | ||||||||||||
|
|
|
|
|
|||||||||||||
|
Cost
of goods sold
|
7,614,773 | 6,485,718 | 25,765,835 | 20,311,410 | ||||||||||||
|
|
|
|
|
|
||||||||||||
|
Gross
profit
|
9,080,156 | 8,010,772 | 29,418,106 | 23,100,152 | ||||||||||||
|
|
|
|
|
|
||||||||||||
|
Operating
and administrative expenses:
|
|
|
|
|
||||||||||||
|
Sales
and distribution
|
1,276,772 | 1,114,955 | 4,966,062 | 3,649,820 | ||||||||||||
|
General
and administrative
|
1,405,844 | 404,772 | 3,614,809 | 2,117,114 | ||||||||||||
|
Research
and development
|
790,961 | 695,694 | 3,042,815 | 2,529,085 | ||||||||||||
|
Total
operating expenses
|
3,473,577 | 2,215,421 | 11,623,686 | 8,296,019 | ||||||||||||
|
|
|
|
|
|
||||||||||||
|
Income
from operations
|
5,606,579 | 5,795,351 | 17,794,420 | 14,804,133 | ||||||||||||
|
|
|
|
|
|
||||||||||||
|
Other
income:
|
|
|
|
|
||||||||||||
|
Interest
income
|
25,316 | 11,520 | 74,522 | 42,724 | ||||||||||||
|
Other
income, net
|
|
|
- | - | ||||||||||||
|
Income
from operations before income tax expenses
|
5,631,895 | 5,806,871 | 17,868,942 | 14,846,857 | ||||||||||||
|
|
|
|
|
|||||||||||||
|
Income
tax expenses
|
|
|
- | - | ||||||||||||
|
Net
income
|
5,631,895 | 5,806,871 | 17,868,942 | 14,846,857 | ||||||||||||
|
|
|
|
|
|||||||||||||
|
Other
comprehensive income:
|
|
|
|
|
||||||||||||
|
Cumulative
currency translation adjustments
|
1,099,203 | 145,913 | 1,401,134 | 66,345 | ||||||||||||
|
|
|
|
|
|||||||||||||
|
Total
comprehensive income
|
6,731,098 | 5,952,784 | 19,270,076 | 14,913,202 | ||||||||||||
|
|
0 |
|
|
|||||||||||||
|
Earnings
per common stock- Basic
|
0.15 | 0.16 | 0.48 | 0.41 | ||||||||||||
|
Earnings
per common stock - Diluted
|
0.14 | 0.15 | 0.44 | 0.41 | ||||||||||||
|
|
|
|
|
|||||||||||||
|
Weighted
average common stock outstanding
|
|
|
|
|
||||||||||||
|
Basic
|
37,239,536 | 37,239,536 | 37,239,536 | 36,088,853 | ||||||||||||
|
Diluted
|
40,174,637 | 38,270,148 | 40,174,637 | 36,088,853 | ||||||||||||
CHINA
BOTANIC PHARMACEUTICALS, INC. AND SUBSIDIARIES
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
For
the years ended October 31,
|
||||||||
|
2010
|
2009
|
|||||||
|
US$
|
US$
|
|||||||
|
Cash
flows from operating activities:
|
||||||||
|
Net
income
|
17,868,942
|
14,846,857
|
||||||
|
Adjustments
to reconcile net income to operating activities:
|
||||||||
|
Depreciation
|
363,567
|
356,440
|
||||||
|
Amortization
|
435,653
|
-
|
||||||
|
Warrants
issued for service
|
342,770
|
-
|
||||||
|
Option
granted to directors
|
31,462
|
-
|
||||||
|
Forgiven
rent
|
367,224
|
-
|
||||||
|
Changes
in assets and liabilities:
|
||||||||
|
Increase
in trade receivables
|
3,814,889
|
(2,328,833
|
)
|
|||||
|
Decrease
in due from related parties
|
(28,300
|
)
|
(275,476
|
)
|
||||
|
Decrease
(Increase) in inventory, net
|
423,480
|
(394,750
|
)
|
|||||
|
Decrease
(Increase) in prepayments
|
89,397
|
(55,491
|
)
|
|||||
|
Decrease
in other receivables, net
|
(94,232
|
)
|
31,180
|
|||||
|
Increase
in accounts payable
|
(44,546
|
)
|
174,979
|
|||||
|
Increase
in value added tax payable
|
(145,371
|
)
|
491,666
|
|||||
|
Increase
in accrued employee benefits
|
442,040
|
414,433
|
||||||
|
(Decrease)
increase in other payable
|
(31,413
|
)
|
(193,472
|
)
|
||||
|
Net
cash provided by (used in) operating activities
|
23,835,562
|
13,067,533
|
||||||
|
Cash
flows from investing activities:
|
||||||||
|
Deposits
for land use right and properties
|
(3,944,749
|
)
|
(14,670,000
|
)
|
||||
|
Deposits
for patents
|
(717,926
|
)
|
(1,467,000
|
)
|
||||
|
Purchase
of property and equipment
|
(36,473
|
)
|
(84,371
|
)
|
||||
|
Net
cash used in investing activities
|
(4,699,148
|
)
|
(16,221,371
|
)
|
||||
|
Cash
flows from financing activities:
|
||||||||
|
Proceeds
from share issues
|
-
|
1,500,000
|
||||||
|
Net
cash provided by financing activities
|
-
|
1,500,000
|
||||||
|
Effect
of exchange rate changes on cash
|
578,214
|
17,659
|
||||||
|
Net
decrease in cash and cash equivalents
|
19,714,628
|
(1,636,179
|
)
|
|||||
|
Cash
and cash equivalents, beginning of year
|
8,111,514
|
9,747,693
|
||||||
|
Cash
and cash equivalents, end of year
|
27,826,142
|
8,111,514
|
||||||
|
Supplemental
disclosure of cash flow information:
|
||||||||
|
Cash
paid during the year for income taxes
|
-
|
-
|
||||||
|
Interest
paid during the year
|
-
|
-
|
||||||
###